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Immersion Stock Falls 18% in 3 Months: A Potential Buying Opportunity?
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Immersion Corporation (IMMR - Free Report) has seen its stock price plunge by 18.4% in the past three months, prompting investors to question whether this dip presents a buying opportunity. In stark contrast to the relatively stable S&P 500 and the Technology Select Sector SPDR Fund’s (XLK - Free Report) modest 4.1% decline, Immersion's drop has been far more significant. But does this drop reflect underlying weaknesses, or is it a temporary pullback caused by external factors?
3-Month Price Return Performance
Image Source: Zacks Investment Research
What’s Behind IMMR Stock Price Decline?
Immersion's recent stock plunge is the result of profit-taking. Following a bullish run that saw the stock hit a 52-week high of $13.94 on July 29, 2024, many investors decided to lock in gains. This created selling pressure, which compounded the downturn. Moreover, the stock’s premium valuation raised concerns about its near-term growth potential, prompting some investors to reassess their positions.
Image Source: Zacks Investment Research
Despite this, the decline does not signal weakening fundamentals. On the contrary, Immersion's financial health and growth prospects remain robust, making this an appealing moment for investors seeking long-term gains.
Immersion’s Industry Leadership and Growth Potential
The company is a leader in the growing haptic technology space, which provides tactile feedback for a range of industries, including gaming, automotive and virtual reality (VR). The demand for haptic technology is on the rise, and Immersion’s robust intellectual property portfolio — supported by numerous patents — puts it in a favorable position to benefit from this growth.
The company’s technology is already present in more than 3 billion devices globally, and its impressive client base includes more than 150 licensed customers. This strong market presence solidifies Immersion’s position as a key player in the haptic space.
Immersion’s partnerships are a major factor driving its market success. Its collaboration with Sony Group Corporation (SONY - Free Report) for the PlayStation 5’s DualSense controller has enhanced gaming experiences, highlighting the growing importance of haptic feedback in the entertainment sector. Licensing agreements with Samsung and Meta Platforms, Inc. (META - Free Report) extend Immersion’s reach into VR, gaming and mobile markets.
Samsung’s renewed license agreement with Immersion allows its affiliates to continue utilizing Immersion’s patents. Meta Platforms has signed a deal to incorporate Immersion’s technology into its hardware, software, VR and gaming products. These partnerships not only provide Immersion with a steady revenue stream but also validate the company’s technology, offering long-term growth potential.
Immersion’s Impressive Financial Performance
Immersion’s recent financial performance shows that the company is on solid footing. In the second quarter of 2024, revenues surged to $99.4 million, a 14-fold increase from the prior year. Even when excluding contributions from recent acquisitions, the company’s organic growth was impressive, with a sevenfold increase in revenues. Earnings per share also saw substantial growth, rising more than fourfold to 89 cents from 21 cents in the previous year.
This strong performance indicates that despite short-term stock volatility, Immersion’s fundamentals remain solid. The Zacks Consensus Estimate for 2024 earnings indicates analysts’ positive sentiment and expectations for continued growth.
Image Source: Zacks Investment Research
Conclusion: Time to Buy Immersion Stock
Despite recent volatility, Immersion remains a strong player in the tech sector. The company’s leadership in the fast-growing haptics industry, coupled with strategic partnerships and a solid financial foundation, makes it an attractive investment.
The recent dip in the share price offers a rare opportunity to invest in a company with significant growth drivers and long-term potential. Now is an excellent time to buy and hold this stock as it continues to capitalize on its innovative technology and expanding market reach. IMMR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Immersion Stock Falls 18% in 3 Months: A Potential Buying Opportunity?
Immersion Corporation (IMMR - Free Report) has seen its stock price plunge by 18.4% in the past three months, prompting investors to question whether this dip presents a buying opportunity. In stark contrast to the relatively stable S&P 500 and the Technology Select Sector SPDR Fund’s (XLK - Free Report) modest 4.1% decline, Immersion's drop has been far more significant. But does this drop reflect underlying weaknesses, or is it a temporary pullback caused by external factors?
3-Month Price Return Performance
Image Source: Zacks Investment Research
What’s Behind IMMR Stock Price Decline?
Immersion's recent stock plunge is the result of profit-taking. Following a bullish run that saw the stock hit a 52-week high of $13.94 on July 29, 2024, many investors decided to lock in gains. This created selling pressure, which compounded the downturn. Moreover, the stock’s premium valuation raised concerns about its near-term growth potential, prompting some investors to reassess their positions.
Image Source: Zacks Investment Research
Despite this, the decline does not signal weakening fundamentals. On the contrary, Immersion's financial health and growth prospects remain robust, making this an appealing moment for investors seeking long-term gains.
Immersion’s Industry Leadership and Growth Potential
The company is a leader in the growing haptic technology space, which provides tactile feedback for a range of industries, including gaming, automotive and virtual reality (VR). The demand for haptic technology is on the rise, and Immersion’s robust intellectual property portfolio — supported by numerous patents — puts it in a favorable position to benefit from this growth.
The company’s technology is already present in more than 3 billion devices globally, and its impressive client base includes more than 150 licensed customers. This strong market presence solidifies Immersion’s position as a key player in the haptic space.
Immersion’s partnerships are a major factor driving its market success. Its collaboration with Sony Group Corporation (SONY - Free Report) for the PlayStation 5’s DualSense controller has enhanced gaming experiences, highlighting the growing importance of haptic feedback in the entertainment sector. Licensing agreements with Samsung and Meta Platforms, Inc. (META - Free Report) extend Immersion’s reach into VR, gaming and mobile markets.
Samsung’s renewed license agreement with Immersion allows its affiliates to continue utilizing Immersion’s patents. Meta Platforms has signed a deal to incorporate Immersion’s technology into its hardware, software, VR and gaming products. These partnerships not only provide Immersion with a steady revenue stream but also validate the company’s technology, offering long-term growth potential.
Immersion’s Impressive Financial Performance
Immersion’s recent financial performance shows that the company is on solid footing. In the second quarter of 2024, revenues surged to $99.4 million, a 14-fold increase from the prior year. Even when excluding contributions from recent acquisitions, the company’s organic growth was impressive, with a sevenfold increase in revenues. Earnings per share also saw substantial growth, rising more than fourfold to 89 cents from 21 cents in the previous year.
This strong performance indicates that despite short-term stock volatility, Immersion’s fundamentals remain solid. The Zacks Consensus Estimate for 2024 earnings indicates analysts’ positive sentiment and expectations for continued growth.
Image Source: Zacks Investment Research
Conclusion: Time to Buy Immersion Stock
Despite recent volatility, Immersion remains a strong player in the tech sector. The company’s leadership in the fast-growing haptics industry, coupled with strategic partnerships and a solid financial foundation, makes it an attractive investment.
The recent dip in the share price offers a rare opportunity to invest in a company with significant growth drivers and long-term potential. Now is an excellent time to buy and hold this stock as it continues to capitalize on its innovative technology and expanding market reach. IMMR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.